ARES SERONO - HOW TO PLAY THE STOCK

Commenting on Italo/Swiss Ares Serono, Andrew Offitt of US-based Fidelity Investments says "there's really only one way to play it" if you want to invest in companies dealing with fertility problems. About $260 million, or 35%, of Ares Serono's revenues in 1991 came from the sale of its six fertility-boosting drugs. While Syntex makes Synarel (nafarelin) and Abbott produces Lupron (leuprorelin), he noted that "you don't buy these" companies' stock for these drugs alone, since "the companies are too big and the drugs are too small."

By pursuing a market in the USA that many have been overlooked, Ares Serono has been able to keep prices high. Patients in the USA pay about $773 per cycle for both Pergonal (menotropin) and Metrodin (urofilitropin), the company's best-selling drugs. The price rises to $1,600 if they are used as part of an in vitro fertilization program. The high prices will probably stay right up there, goes the general theory, until Akzo receives US Food and Drug Administration approval for its Humegon (combination FGH and LH), a competitor to Pergonal that is marketed abroad.

Even though none of Ares Serono's six fertility drugs have patent protection, there are other factors which keep competitors out of the market. Pergonal, Metrodin and Profasi (hCG) are made from the urine of post-menopausal or pregnant women - which does present other companies with a logistical problem.